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Sales of physical albums have steadily decreased over the past half decade, and now one major label is hoping to stem the decline by adopting a daring new strategy: lowering the price of CDs. Universal Music Group has revealed a plan to reduce the wholesale cost of their albums in order to decrease the retail price of single-disc albums to $10 or less, Billboard.biz reports. Under the new plan, sales of CDs will only boast a 25 percent profit margin, but UMG hopes the increase of CD sales volume will help reinvigorate their revenues.

While some may deem UMG’s strategy as “too little, too late,” the move does put the price of physical discs in line with what digital music services like iTunes charge for full album downloads, making physical discs a more attractive option. “We think it will really bring new life into the physical format,” Universal Music Group Distribution president/CEO Jim Urie said. UMG revealed that they plan on selling more deluxe editions of albums, however those discs will carry a higher price tag.

While retailers are applauding the move, Billboard.biz writes that the other major labels aren’t too pleased with UMG’s price shift. “Why does Universal feel the need to get below $10?,” a distributor at a competing major wondered. However, there is precedent for UMG believing their new strategy will work: When Trans World Entertainment, who runs music stores like f.y.e. and Wherehouse Music, tested out a $9.99 price plan, CD sales jumped 100 percent.

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Live Nation and Ticketmaster, the two biggest players in the $4.4 billion worldwide concert business, received U.S. Department of Justice approval Monday for a merger that is likely to affect every live-music fan, artist, agent, manager and promoter. In a statement, Ticketmaster’s chief executive, Eagles manager Irving Azoff, called the decision “a great win for fans,” but some in the business fear the companies’ combined power will make it difficult for outsiders to promote shows and sell tickets. “It’s disappointing to me. It’s just another step in eliminating competition,” says Buck Williams, a Nashville agent who represents R.E.M. and Widespread Panic. “They’ve pulled the rug out from under the entrepreneurs, to some degree.”

The new Live Nation Entertainment, which will begin merging its operations as early as Wednesday, will own a huge chunk of the business: Ticketmaster’s Front Line management company represents the Eagles, Jimmy Buffett, Christina Aguilera and many other artists, while Live Nation’s exclusive clients include Madonna and Jay-Z; Ticketmaster has exclusive ticketing deals with most of the major U.S. arenas, while Live Nation owns and operates 140 top venues overall, including most of the amphitheatres; and, of course, Ticketmaster sells some 140 million tickets a year.

These combined assets make reps for some music stars optimistic. “My hope and belief is that there is going to be an expanded opportunity for touring artists to [experiment with] a variety of different products,” says Jim Guerinot, manager of No Doubt, Nine Inch Nails and others. “And I look forward to trying those things.”

Azoff and Live Nation’s CEO, Michael Rapino, spent much of 2009 arguing the merged company would have the clout and flexibility to fix the “broken” concert business. The new Live Nation Entertainment, they said, would have the power and flexibility to cut costs, make more money from the lucrative resale market and ultimately reduce ticket prices and service fees. In one of the first major antitrust decisions during the Obama Administration, the Justice Department agreed — to a point. Before approving the merger, U.S. attorneys forced Ticketmaster to license its software to top competitor AEG Live and forbade the merged company from retaliating against any concert venue that uses a non-Ticketmaster ticketing outlet.

The agreement “promotes robust competition for primary ticketing services and preserves incentives for competitors to innovate and discount, which will benefit consumers,” said Christine Varney, an assistant attorney in the Justice Department’s antitrust division, in a statement. (Executives for Live Nation and Ticketmaster were unavailable for interviews. Several of the new companies top competitors refused comment or didn’t return phone calls. AEG reps would only give a statement saying its Justice Department deal “will foster our ability to compete effectively in the ticketing, venue operation and live event promotion businesses.”)

Will the merger lower ticket prices, as Azoff and Rapino insist? It’s too early to say, but several artist reps were skeptical. “I don’t think prices are going to come down,” says Tom Windish, a Chicago agent who represents Animal Collective, Hot Chip, the Knife and dozens of other top indie artists. “I don’t think it’s going to change that much. I don’t see Live Nation getting less money, I don’t see artists getting less money and I don’t see Ticketmaster charging a surcharge that’s lower than [what] they can possibly get. If anything, it’ll be higher.”

Photo: Wargo/Getty Images for Island Def Jam

The 2009 year-end Nielsen SoundScan numbers reveal that Taylor Swift edged Susan Boyle in terms of album sales, and that the Beatles and Michael Jackson can still move major units. But how did the music biz do overall last year? Slightly better than the year before. Total music purchases were up 2.1 percent over 2008, as ‘09 brought in 1.545 billion overall music sales — which factors in albums, singles, digital tracks and music videos — compared to the 1.513 billion combined in 2008.

(Check out Rolling Stone’s Best Albums and Best Songs of 2009.)

Despite the two percent increase, total album sales continued to slide at an alarming rate. Physical and digital sales combined for 373.9 million albums sold in 2009, down from the 428.4 million in 2008 for a 12.7 percent decrease. The number of albums purchased via online retailers also dropped significantly, from 27.5 million in 2008 to 25.3 million in 2009, an eight percent slide. However, more consumers flocked to digital services for album purchases: the year-end figure of 76.4 million albums sold is a 16.1 percent increase over 2008’s figures. It appears only CDs were affected by the album slump, as vinyl sales were also up 33 percent over 2008 figures.

The sales decline was spread across all genres: rock sales were down 11.1 percent, rap sales down 20.9 percent and Latin music down a staggering 34.3 percent. Only the country genre, which saw its total sales slump slightly from 47.6 million to 46.1 million, and jazz, whose sales only fell 0.1 percent from 2008, seemed to have bucked the trend.

The 2009 market share chart reveals some major labels are more major than others. UMG led the charge once again by selling 30.2 percent of all albums bought in 2009, down slightly from their industry-leading 31.5 percent a year ago. Thanks in large part to Michael Jackson, Sony’s numbers were well up, grabbing a 28.58 percent market share compared to their 25.3 percent total in 2008. Warner Music saw its share drop from 21.38 percent in ‘08 to 20.55 percent in ‘09, while EMI made up that difference by jumping from 8.97 percent in ‘08 to 9.21 percent in ‘09. All other labels combined factored in for an 11.47 percent market share.

The best sign for the industry: Digital track sales topped the billion mark for the second consecutive year, besting 2008’s record with 1,160,000,000 downloads combined. Eighty-eight songs alone topped the million-download mark in 2009, up from just 71 songs last year. Additionally, in 2008, Rihanna was the top digital draw with 9.9 million downloads. In 2009, four artists topped that: Lady Gaga, Black Eyed Peas, Michael Jackson and Taylor Swift. To make a long sales story short: Digital > CD.

In some smaller categories of note, Taylor Swift’s “You Belong to Me” was named Nielsen BDS’ Most Played Song of 2009, with “Love Story” placing second on that list as well. Fittingly, Swift was the Most Played Artist and also the Most Streamed Artist according to Nielsen BDS. Beyoncé’s “Single Ladies (Put a Ring on It)” was the year’s most streamed music video.

Warner Music Group has teamed up with Hulu to bring the label’s artist roster to the video streaming site. The Resistance rockers Muse are the first beneficiaries of this new deal, as the band’s Hulu page is stocked with music videos and live performances. The deal also calls for artist pages for Jason Mraz and Paramore to be launched in 2010, with more WMG artists to follow in the new year. Interestingly, Warner Music remains the lone major label holdout to not agree to a deal with the new video streaming site Vevo, a venture between YouTube and EMI, Universal and Sony.

One of the immediate benefits of this partnering was that Muse’s Saturday Night Live performance was posted on Hulu, as Rolling Stone happily discovered in this week’s SNL rundown. Previously, neither Hulu nor YouTube were authorized to post musical guest spots, but with Hulu coming to terms with WMG and EMI, the SNL performances will now hopefully become more readily available.

As Rolling Stone previously reported, EMI struck a similar deal with Hulu in November, with Norah Jones pioneering the label’s role on the video streaming site by becoming the first singer to get her own artist page on Hulu. Jones’ page featured all her music videos, live performances of The Fall songs, interviews and more. EMI anticipated giving more artists on their roster the full artist page treatment. At the time, Hulu also said they hoped to partner with all the major labels.

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The proposed merger between Live Nation and Ticketmaster took one giant step toward becoming a reality yesterday as the U.K. Competition Commission approved of the union, which would join the biggest ticketing and artist management company with the largest concert promotions company. The last obstacle to the proposed merger is approval from Canada and the United States, where the Department of Justice is reportedly in the final round of review before finally deciding whether to allow the massive venture.

According to Live Daily, the U.K. Competition Commission ruled “the merger will not result in a substantial lessening of competition in the market for live music ticket retailing or in any other market in the U.K., including live music promotion and live music venues.” The merger had previously been approved in both Norway and Turkey.

As Rolling Stone previously reported, when Live Nation launched their own ticketing service in January 2009, the move seemed designed to loosen Ticketmaster’s grip on the ticketing industry. The two companies then engaged in an arms race of sorts, as Ticketmaster paired with Front Line Management while Live Nation signed artists like Jay-Z and Madonna to powerful 360 deals. After only a few months, however, the two bulked-up companies decided to merge, which drew skepticism from many corners of the music industry.

“We are very pleased with the Competition Commission’s decision to clear the merger. Today’s clearance is an important milestone in the regulatory review process, and brings the companies a step closer to creating a new kind of live entertainment business,” managing director of Ticketmaster U.K. Chris Edmonds said in a statement. “During the course of this merger process, we have listened to our fans, artists and other parties. We have reassured them that by combining the resources of these two companies, we will deliver a better live music experience for the entire sector.”

As Rolling Stone previously reported, a wide variety of interested parties from members of Congress to Bruce Springsteen have questioned the proposed merger. Its opponents argue that Live Nation Ticketmaster would have a monopoly on the touring industry by controlling both a large share of the ticketing and major venues in the U.S.. Recently, the National Association of Ticket Brokers, the National Consumers League and several other antitrust and consumer groups teamed up to attack the merger with a new Website called TicketDisaster.org.

“As the Department of Justice reaches the final round of reviewing this merger, only one question must be answered: will the merger lead to increased prices, poorer service, or less innovation? In this case, the answer is all of the above, which is why this merger needs to be blocked,” reads a statement on TicketDisaster.

When rumors of the merger first emerged, Springsteen — whose fans faced a debacle when they were inadvertently redirected to Ticketmaster’s secondary market site TicketsNow and paid higher prices for E Street tix — wrote, “The one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing. If you, like us, oppose that idea, you should make it known to your representatives.”

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